The marginal cost curve intersects the average variable cost (AVC)curve _____
A)only when the AVC curve is rising.
B)at the AVC curve's maximum point.
C)at the AVC curve's minimum point.
D)only when the AVC curve is sloping downward.
E)when the AVC curve intersects the fixed cost curve.

Question

Quizplus · Accepted Answer

The marginal cost curve intersects the average variable cost (AVC) curve at its minimum point, also known as the point of diminishing returns. This is because at this point, the AVC curve is decreasing at a decreasing rate, and the marginal cost curve represents the additional cost of producing one more unit of output. At this point, the marginal cost is also decreasing, but at a slower rate than the AVC curve, causing the two curves to intersect at the AVC curve's minimum point. Therefore, the best choice is C, at the AVC curve's minimum point.

The Marginal Cost Curve Intersects the Average Variable Cost (AVC)curve